Destroyer project now three years behind schedule

THE $8 billion project to build Australia’s most powerful warships has been delayed again and is now three years behind schedule and $800 million over budget.

By Ian McPhedran

News Corp Australia NetworkMay 1, 20152:30pm

The future ... A computer generated image of the Air Warfare Destroyer (AWD) now running three years late. Picture: Defence.Source:Supplied

THE $8 billion project to build Australia’s most powerful warships — already bedevilled by cost and schedule overruns — will run at least an extra year late with the first ship not due for delivery until 2017.

The latest delay pushes delivery out three years behind schedule and was revealed by senior defence official Colin Thorne from the Defence Materiel Organisation.

He has read a damning but secret report into the Hobart Class Air Warfare Destroyer (AWD) Program by naval shipbuilding experts Don Winter and John White, that the government refuses to release.

Adding insult to injury defence bureaucrats chose to exclude Australian shipyards from a $1 billion taxpayer funded contract to provide the navy with two large supply ships.

The limited tender went to the same yards in Spain and South Korea that local builders — BAE Systems in Melbourne and government owned ASC in Adelaide — had partnered with to try and win the work.

Another 12 smaller navy vessels were built in a cheap yard in Vietnam during the past four years.

Big build ... Air Warfare Destroyer being built at ASC Adelaide. Picture supplied.Source:Supplied

The Abbott Government said that local builders were not capable of handling 20,000-tonne plus vessels despite the fact that the two Landing Helicopter Docks (LHDs) being assembled by BAE Systems at Williamstown in Melbourne weigh in at 27,000 tonnes.

But it is the latest delay to the three Air Warfare Destroyers that has created the biggest concerns.

“The previous government announced a schedule slip of 15, 18 and 21 months delay to the three ships. I anticipate a further delay of around 12 months to each of the ships will be the outcome of program rebaselining activity presently underway,” Mr Thorne told a shipbuilding conference.

“That would mean early-2017 delivery of first ship, mid-2018 for second ship and early-2020 for the third ship.”

Former Minister for Defence ... Senator David Johnston said he wouldn’t trust ASC to build a “canoe”. Picture supplied.Source:News Corp Australia

Under the original contract the first ship was due in service in 2014 and the latest “rebaselining” had the first ship, HMAS Hobart, in navy service in 2016.

Mr Thorne, the general manager of land and maritime with DMO, said the big problem with the project had been low productivity at the ASC shipyard.

“AWD Shipbuilding is running at up to 170 man hours per compensated gross tonne,” he said.

“This compares with core productivity of around 60 man hours per compensated gross tonne which should be possible from an experienced and productive shipyard in the Australian context.

34 years old ... HMAS Tobruk returning to the Port of Townsville from the Cyclone Pam relief efforts in Vanuatu. Picture: Supplied.Source:News Corp Australia

Those figures prompted previous Defence Minister David Johnston to say that he wouldn’t trust ASC to build a “canoe”. He was sacked soon afterwards.

Defence has also used the numbers, without taking account of other complications in the DMO imposed AWD Alliance that included dodgy drawings from Spanish designer Navantia, for sending work offshore and limiting ASC’s involvement in the future submarine program.

The $50 billion submarine project did not even rate a mention in the expensive Rand Review of naval shipbuilding.

Political delays are costing taxpayers millions of dollars to keep old support ships such as HMAS Tobruk (34 years) and HMAS Success (30 years) at sea.

Big bucks ... Political delays are costing taxpayers millions of dollars to keep old support ships such as HMAS Tobruk (34 years) and HMAS Success (30 years) at sea. Picture supplied.Source:Supplied